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2004 Plastic Processors ConferenceHouston London Singapore Dubai
PET OutlookPET Outlook
Chase WillettChase WillettDirectorDirector
Polyester & Polyester Raw Polyester & Polyester Raw MaterialsMaterials
CMAI USACMAI USA
2004 Plastic Processors ConferenceHouston London Singapore Dubai
39%
37%
24%
2003
Tot Dem : 5.6 Mil Tons
35%
39%
26%
2008
Global PET DemandGlobal PET Demand
Tot Dem : 9.7 Mil Tons
Tot Dem : 14.9 Mil Tons
1998
21%
Asia
45%
Americas
34%
Europe, MDE & Africa
Average Annual Growth1998-2003 11.5% 810 KMT2003-2008 9.0% 1045 KMT
2004 Plastic Processors ConferenceHouston London Singapore Dubai
Polyester Bottle Resin Demand Growth 2003-2008
Americas28%
Europe/Middle East/Africa
41%
China16%
Asia less China15%
2004 Plastic Processors ConferenceHouston London Singapore Dubai
Americas PET Demand
0
1000
2000
3000
4000
5000
6000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
U.S. South America Mexico Canada
Thousand Metric Tons
2004 Plastic Processors ConferenceHouston London Singapore Dubai
0
500
1000
1500
2000
2500
3000
3500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Thousand Metric TonsUnited States PET DemandUnited States PET Demand
Food Alcohol CSD DairyWater, Isotonics Pharmaceutical Cosmetics Other PET
2004 Plastic Processors ConferenceHouston London Singapore Dubai
World PET Demand
0
5
10
15
20
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 200864
68
72
76
80
84
North America Europe Asia South AmericaMiddle East/Africa Operating Rate Total Capacity
Million Metric Tons Percent Operating Rate
2004 Plastic Processors ConferenceHouston London Singapore Dubai
50
55
60
65
70
75
80
85
90
95
100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Percent
World North America West Europe Northeast Asia
PET Regional Operating Rate
2004 Plastic Processors ConferenceHouston London Singapore Dubai
Asia PET Supply/Demand
0
1
2
3
4
5
6
7
8
9
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 200855
60
65
70
75
80
85
90
95100
China DemandNon-China Asia DemandCapacityOperating rates
3.1 million tons of Surplus
5.5 million tons of Surplus
Op. Rate, %Million Tons
2004 Plastic Processors ConferenceHouston London Singapore Dubai
China PET Supply/Demand
0
500
1000
1500
2000
2500
3000
3500
4000
4500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 200835
40
45
50
55
60
65
70
75
80Domestic DemandCapacityOperating rates
1.0 million tonsof Surplus
3.0 milliontons of Surplus
Op. Rate, %Thousand Tons
2004 Plastic Processors ConferenceHouston London Singapore Dubai
The China Advantage
Construction Cost per Annual Ton of Output
After Tax Annual Cash Flow To Generate Reinvestment
Per Ton of Output
The West $440 - $550 $110 - $138
Asia $400 - $550 $72 - $99
China $270 - $350 $49 - $59
How can they do this?
2004 Plastic Processors ConferenceHouston London Singapore Dubai
The China Advantage
• Low cost domestic technology
• Nearly 100% local fabrication
• 100% domestic erection
2004 Plastic Processors ConferenceHouston London Singapore Dubai
U.S./Asia Price Comparison
0
200
400
600
800
1000
1200
1400
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Dollars per Ton
U.S. Dlvd. Discounted Asia Production Cash CostAsian Discount to U.S. Importation Costs
2004 Plastic Processors ConferenceHouston London Singapore Dubai
U.S. PET Import Status
-
5
10
15
20
25
30
May-03 Aug-03 Nov-03 Feb-04-
100
200
300
400
500
600Thousand Tons - Monthly Thousand Tons - Cumulative
0
150
300
U.S. - Asia Price Differential
Dollars per Ton
Cumulative Total Imports
Canada
Mexico
Asia
2004 Plastic Processors ConferenceHouston London Singapore Dubai
U.S. PET Resin Net Trade
(400)
(300)
(200)
(100)
-
100
200
300
1996 1997 1998 1999 2000 2001 2002 2003 2004
Canada Mexico Asia Europe South America Middle East & Africa
-000- Metric TonsThrough March 2004- Adjusted and Seasonalized
Net Imports
Net Exports
2004 Plastic Processors ConferenceHouston London Singapore Dubai
60107
81
84
65
36
28
18
45
26
-
50
100
150
200
250
300
1996 1997 1998 1999 2000 2001 2002 2003 2004
-000- Metric TonsThrough April 2004 - Adjusted and SeasonalizedU.S. PET Resin Imports from Asia
Thailand Indonesia India TaiwanKorea South Malaysia Other ASP
GSP
2004 Plastic Processors ConferenceHouston London Singapore Dubai
North American Convertible Capacity
Solid Stating Total Melt ConvertibleKosa 835 1340 505Wellman 470 965 495Nanya 405 835 430DAK 300 540 240
Total Convertible Capacity 1670
2004 Plastic Processors ConferenceHouston London Singapore Dubai
Raw Material UtilizationPer Unit of PET
Paraxylene (PX)
0.58O2
Terephthalic Acid (PTA)
+0.86
Polyethylene Terephthalate
(PET)
+Ethylene Glycol
(MEG or EG)0.36
Ethylene0.22
O2+ + H2O
EthyleneOxide (EO)
2004 Plastic Processors ConferenceHouston London Singapore Dubai
0
10
20
30
40
50
60
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Million Tons
Fiber Bottle Resin Other
World Polyester Melt Demand Forecast
2004 Plastic Processors ConferenceHouston London Singapore Dubai
Polyester Melt Demand Growth
-1000
0
1000
2000
3000
4000
5000
6000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Thousand Tons
65
70
75
80
85
90
95
100% Operating Rate
Global Polyester Raw Material Position
PX Cap Growth in Poly Equiv.MEG Cap Growth in Poly Equiv. PX Operating RateMEG Operating Rate
2004 Plastic Processors ConferenceHouston London Singapore Dubai
-1000
0
1000
2000
3000
4000
5000
6000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Thousand Tons
-100
0
100
200
300
400
500
600Dollars per Ton Margin
Polyester Melt Demand Growth PX Growth in Polyester Equiv.MEG Growth in Polyester Equiv. PX MarginMEG Margin
Global Polyester Growth
2004 Plastic Processors ConferenceHouston London Singapore Dubai
110%111%100%
85% Polyester
105%105%103%
95% 103%105%
99%98%98%
80% Polyester
Who Runs Out First?Global Polyester Chain Utilizations @ Various Polycondensation Rates
97%98%90%
93%92%93%
80%
90%
100%
110%
MEG PX PTA MEG PX PTA MEG PX PTA
75% Polyester
2004
2005
2004 2005Utilization Rates, %
Forecast Global Polycond OR for 2004 & 2005 ~75%Seasonal variation & volatility potential +/- 5%
2004 Plastic Processors ConferenceHouston London Singapore Dubai
0
200
400
600
800
1000
1200
1400
1600
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Dollars per Ton
Paraxylene PTA MEG Conversion PET MarginPET Price
U.S. PET EconomicsU.S. PET Economics
2004 Plastic Processors ConferenceHouston London Singapore Dubai
-500
0
500
1000
1500
2000
Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05
Dollars per Ton
Paraxylene PTA MEG Conversion PET MarginPET Price
U.S. PET PricesU.S. PET Prices
2004 Plastic Processors ConferenceHouston London Singapore Dubai
North America PET Demand
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 200874
76
78
80
82
84
86
88
90
92
94
U.S. Mexico Canada Operating Rate Total Capacity
Million Metric Tons Percent Operating Rate
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